ZEBRA INDUSTRIES (OROGENESIS NOVA) LTD v. WAH TONG PAPER PRODUCTS GROUP LTD

HCMP 3280/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 3280 OF 2014

(ON AN INTENDED APPEAL FROM HCMP NO. 436 OF 2013)

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J U D G M E N T
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Hon Kwan JA (giving the judgment of the court):

1.  We have before us an application for extension of time for the plaintiff to file and serve a notice of appeal against the decision of G Lam J on 27 October 2014 refusing leave to re-amend its statement of claim except for five proposed minor amendments (“the Refusal Order”). The plaintiff has obtained leave from a Master on 8 and 23 December 2014 for its director Mr Elijah Saatori to represent it in the intended appeal and in the present application for extension of time to appeal.

2.  In support of the present application issued on 17 December 2014, the plaintiff has filed an affirmation of Mr Saatori on the same date.

3.  The court gave directions to the parties by letter dated 8 January 2015 on the filing of any affirmation in opposition and in reply, and the lodging of hearing bundle, skeleton submissions and authorities by the parties.

4.  No further evidence was adduced in respect of this application, as the defendant did not file evidence in opposition.

5.  The plaintiff did not comply with the direction to lodge a hearing bundle or skeleton submission by 27 January.  On 30 January, the defendant prepared a hearing bundle and lodged its skeleton submission without the benefit of reading the plaintiff’s submission.

6.  At the hearing, Mr Saatori made oral submissions to support the plaintiff’s case why leave to file the notice of appeal out of time should be granted.  On the merits of the intended appeal, he urged the court to allow the plaintiff to bring the appeal so that he could argue for leave to re-amend the statement of claim to permit the plaintiff to clarify the claim for damages it had intended to bring all along based on perjury and duress of goods.  The defendant relied on its skeleton submission.

7.  The factors that will be considered in the exercise of discretion whether to extend time for appealing are well established.  They are: (1) the length of the delay; (2) the reasons for the delay; (3) the chances of the intended appeal succeeding if time for appealing is extended; and (4) the degree of prejudice that may be occasioned to the potential respondent if an extension of time is granted (Hong Kong Civil Procedure 2015, vol 1, §59/4/9).

8.  The circumstances for the delay in filing a notice of appeal within time were as follows.

9.  On 27 October 2014, the judge handed down his decision of 42 pages on four interlocutory applications taken out by the plaintiff including an application to re-amend its statement of claim (“the Decision”).  On 30 October, Mr Saatori sent a letter by fax to the judge of 10 pages bearing the caption “Errors in the 27 Oct Decisions” and purporting to set out errors of law and misunderstandings of the judge in the Decision.  He sought “directions” on how to deal with the alleged errors, “without the pain and distraction of a Leave to Appeal Hearing”.

10.  The letter in reply given by the court dated 4 November was as follows:

“With reference to your faxed letter dated 30 October 2014, the Hon Mr Justice G Lam has directed:

“The relevant applications have been heard and determined. If the plaintiff wishes to raise further arguments against the court’s decision, it should do so by way of an appeal, and apply for such leave as may be necessary.” ”

11.  Mr Saatori claimed in his supporting affirmation that the judge “directed” the plaintiff to file an application for leave to appeal against his order.  That is not the case on a proper reading of the letter of the court.

12.  On 7 November, two summonses were issued by the plaintiff, one for leave to appeal against the Refusal Order, and the other against the judge’s refusal to make an order for discovery.

13.  The summonses were heard by the judge on 1 December and he handed down his decision on 5 December.  The judge held that his decision refusing leave to re-amend the statement of claim to raise new claims falls within Order 59 rule 21(2)(i) and is to be regarded as an order determining in a summary way the substantive rights of a party within rule 21(1)(a).  Hence, an appeal lies as of right against the Refusal Order.  He therefore made no order on that summons and made no order as to costs.  As for the summons seeking leave to appeal against the refusal of an order for discovery, this was dismissed with costs as the judge saw no prospect of success on appeal.

14.  On 8 December, the plaintiff insisted on filing a notice of appeal against the Refusal Order, notwithstanding it was 14 days out of time.  The court made a direction on 9 December that no further proceedings in the appeal would be allowed before an extension of time to file and serve the notice of appeal is granted.  Hence, the plaintiff issued the present application for extension of time on 17 December.

15.  We do not think the plaintiff should be regarded as entirely blameless for failing to file a notice of appeal within time.  But taking into account it did not have legal representation, we do not think its failure to do so is as reprehensible had it been legally represented.

16.  The more important consideration is the merits of the intended appeal.

17.  We are in no doubt that the intended appeal against the Refusal Order is completely hopeless.  The judge had considered the matter most comprehensively and given eight reasons in §§63 to 80 of the Decision why he refused to exercise his discretion to allow the pleadings to be amended.  We have considered the grounds of appeal in the notice of appeal filed without leave on 8 December, the grounds of appeal advanced in Mr Saatori’s “Interlocutory Appeal Affirmation” filed on 7 November, and what was urged upon us in Mr Saatori’s oral submission.  We can discern no possible basis to interfere with this case management decision of the judge.  The applicable principles are too well established to require repetition, see厦門新景地集團有限公司 v Eton Properties Ltd & Ors, HCMP 13, 15, 18, 21/2012, 14 February 2012, §9; Li Xiao Yun & Anr v China Gas Holdings Ltd, CACV 38/2013, 11 March 2013, §§17 to 19.  The subsequent decision of M Chan J on 31 October 2014 refusing to grant leave to the plaintiff to commence proceedings for committal of contempt against the defendant would only make it an even stronger case that the intended appeal is doomed to fail.  There are plainly no exceptional circumstances to warrant the granting of leave to re-amend the statement of claim in a substantial way which has the inevitable effect of de-railing the trial dates of this case early next month.

18.  Accordingly, we refuse to exercise our discretion to extend time to appeal.

19.  We have heard arguments on costs.

20.  Costs of this application should follow the event.  As the appeal court has stated in Li Xiao Yun at §18, unmeritorious appeals against case management decisions which have the tendency of disrupting the other party’s preparation for trial and are wholly inconsistent with the underlying objectives in Order 1A rules 1 and 3 ought to be discouraged, and, unless there are good justifications, the unsuccessful appellant should normally be expected to face an order for indemnity costs.

21.  We think it appropriate to order the plaintiff to pay the defendant’s costs of this application on an indemnity basis.  Having considered the defendant’s statement of costs, we make a gross sum order of costs in its favour in the sum of $54,139, making a slight reduction for the time taken by the solicitors for attendance on counsel.